FORT WORTH -- AMR Chief Executive Tom Horton was expected to give leaders of the pilots union "his view of the future" at a meeting today after the Allied Pilots Association agreed to a nondisclosure agreement to formally become part of merger talks between American Airlines and US Airways.
"As the new owners of a significant percentage of the restructured airline, it's APA's responsibility to maximize the value of our investment by conducting thorough due diligence," APA President Keith Wilson told members. "I believe the APA leadership needs to hear what Mr. Horton has to say."In a message sent to members on Wednesday, Wilson thanked the 96 percent of eligible pilots for casting ballots in last week's ratification vote, in which 74 percent approved a new contract. He also updated pilots on the union's board of directors meeting that began on Wednesday afternoon.While he declined to speculate on when a deal might occur, Wilson said the union "must be ready to move quickly toward a potential merger."The US Airways pilots union has also agreed to a nondisclosure agreement (NDA) so it can participate in merger discussions.American told its managers Tuesday that it invited the pilots to the table in concert with the airline's creditors."While we are bound by the terms of an NDA and can't discuss details, American, in collaboration with the (Unsecured Creditors Committee), determined that union involvement in the discussions is an important step to appropriately evaluate the impact of a merger on labor costs, integration and seniority," the Fort Worth-based carrier said in a note to managers on Tuesday.Despite American's success in negotiating new cost-cutting contracts with all its unions, a merger between American and US Airways, led by US Airways Chief Executive Doug Parker, is necessary for American to remain competitive with United Continental and Delta Air Lines, Vicki Bryan, a bond analyst with Gimme Credit, told investors Wednesday."Doug Parker also already achieved more in the first three months of this year with AMR's unions than AMR management accomplished over most of the past decade -- all of AMR's major unions agreed to contract terms with US Airways and remain firmly committed to the merger," Bryan wrote in a research note. "With the pilots from both airlines now joined with the UCC and actively involved in deciding AMR's fate, we feel more confident than ever that the US Airways bid will be accepted, perhaps by Christmas."By bringing both pilots unions into the discussions, Wall Street analysts believe, a merger of the carriers is more likely while American is still in bankruptcy."With these new developments, we believe that the odds of a merger with US Airways before AMR exits bankruptcy has increased to a 75 percent possibility," Maxim Group analyst Ray Neidl wrote in a research note Tuesday. "We look for additional developments before year-end with a final outcome determined in the first quarter."In an interview with Bloomberg TV this week, former AMR Chief Executive Bob Crandall called a merger between the carriers "doable" but said it hinges on the pilots unions agreeing to a scheme to integrate their seniority lists.Andrea Ahles, 817-390-7631Twitter: @Sky_TalkHave more to add? News tip? Tell us
